Summer holidays break the bank for many families, study shows
For kids, the school holidays are a break. For parents, however, they can mean
The latest Family Finances Report from Aviva has highlighted why summer is a financially difficult time for many families. Not only do parents have to find the money to keep kids entertained over the extended break, but their income often falls as they take time off work. As result, Aviva's study found that family debts creep up at this time of year.
Parents spend more than ever on entertainment
The end of the academic year signals an expensive time for families across the UK, and entertaining children seems to be becoming increasingly costly. Aviva's research shows that the average family now spends almost £1,800 per year on entertainment, equating to almost £150 per month. Almost four-fifths of the families surveyed said they had spent money on entertainment and leisure activities this quarter, with children's activities adding £85 to parents' monthly bills.
Incomes fall over summer months
Ideally, household income would cover entertainment expenses. But during the summer, the opposite seems to happen. Aviva found that average family income has fallen by 7% since May 2012, with a typical household bringing in £2,003, down from £2,150 at the start of the summer. It is thought that many parents take unpaid leave or reduce their hours in order to care for their children during the school holidays.
Average debts now exceed £10k
With expenditures rising and incomes falling, it's hardly surprising that Aviva researchers observed an increase in average debts. According to the study, family debt levels rose from £9,314 in May 2012 to £10,563 in August, not including outstanding mortgages.
More than £5,100 of this amount is typically in the form of credit card debt. But families are also turning to less formal types of borrowing -- loans from family and friends more than doubled between May and August 2012, to £1,545. Meanwhile, savings balances have taken a hit, with the average family's savings falling from £1,228 to £1,131 over the summer months.
Louise Colley, head of protection sales and marketing for Aviva, observed that families are being forced to make difficult decisions to make ends meet. However, she seemed relatively unconcerned by the findings.
"It seems that families are trying to cut their cloth accordingly and the fact that some have dipped into savings this quarter suggests they may have been planning ahead," she said in a statement.
Colley also pointed out that summer is "the ultimate seasonal blip," and that normality should soon return for the UK's families.
Published: 27 August 2012
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